Overnight Regulation: EPA seeks input on climate rule replacement | USDA withdraws welfare rules for ‘organic’ animal label | Republican AGs back Trump in consumer bureau fight

Welcome to Overnight Regulation, your daily rundown of news from the federal agencies, Capitol Hill, the courts and beyond. It’s Monday evening and both the House and Senate are in session, trying to pass tax reform and a spending deal before the year ends. Brace yourselves for a busy week.

 

THE BIG STORY:

The Trump administration is kicking off the process to formally consider replacing former President Barack Obama’s climate change rule for power plants.

The Environmental Protection Agency (EPA) put out a notice Monday asking the public to submit ideas for what such a replacement rule would look like.

{mosads}The replacement would almost certainly be less ambitious than Obama’s Clean Power Plan, which envisioned a 32 percent cut in the power sector’s carbon dioxide emissions by 2030.

The Monday notice, known as an advanced notice of proposed rulemaking, comes more than two months after the EPA formally proposed repealing the Clean Power Plan on the basis that it exceeded the authority Congress gave the EPA under the Clean Air Act.

“Consistent with our commitment to the rule of law, we’ve already set in motion an assessment of the previous administration’s questionable legal basis in our proposed repeal of the Clean Power Plan. With a clean slate, we can now move forward to provide regulatory certainty,” EPA Administrator Scott Pruitt said in a statement.

“Today’s move ensures adequate and early opportunity for public comment from all stakeholders about next steps the agency might take to limit greenhouse gases from stationary sources, in a way that properly stays within the law, and the bounds of the authority provided to EPA by Congress.”

Pruitt at a House hearing this month committed for the first time to pursuing a replacement climate rule.

Industry has pushed for a replacement, arguing it would give them certainty and guard against potential lawsuits. But greens are certain to challenge any weaker rule.

The Hill’s Timothy Cama has the story here.

 

ON TAP FOR TUESDAY

The Federal Deposit Insurance Corporation Board meets.

The Senate Banking Committee is expected to vote on nominees to posts at the Export-Import Bank, including former Rep. Scott Garrett (R-N.J.) for bank chief.

 

REG ROUNDUP

Finance: The Justice Department and a group of 13 Republican attorneys general on Monday backed President Trump and his pick for the acting director of the Consumer Financial Protection Bureau (CFPB) in a case challenging his appointment in the district court for Washington, D.C.

Both filed briefs supporting Trump and Office of Management and Budget Director Mick Mulvaney, whom the president named acting director of the CFPB. They argued that Mulvaney is the rightful acting director of the CFPB

CFPB Deputy Director Leandra English is suing Mulvaney and Trump for control of the agency, arguing the line of succession outlined in the Dodd-Frank financial reform law, which created the CFPB, makes her the legal acting chief.

English is appealing the D.C. district court’s decision earlier this month to reject her suit against Trump and Mulvaney. She renewed her complaint with a motion to halt the previous verdict last week.

The Justice Department countered in its Monday brief that the Federal Vacancies Reform Act gives the president clear, specific powers to nominate any Senate-confirmed administration official to temporarily lead a department or agency.

The Hill’s Sylvan Lane has the story here.

 

Agriculture: The Trump administration is rolling back Obama-era rules for how animals should be treated if their meat is going to be sold as “certified organic.”

The U.S. Department of Agriculture (USDA) announced its plan to withdraw the final rules, which were originally set to take effect on March 20 after having been delayed three times.

USDA said the rules exceed the agency’s statutory authority under the Organic Foods Production Act of 1990 to issue animal welfare regulations. The agency called the rules, which govern an animal’s access to outdoor space, transportation and slaughter, among other things, “broadly prescriptive.”

Under the rules, producers and handlers participating in the National Organic Program stipulate that poultry must be housed in spaces that are big enough for the birds to move freely, stretch their wings, stand normally and engage in natural behaviors.

Livestock, meanwhile, must be provided access to an outdoor space year-round and be kept in indoor pens that are sufficiently large, solidly built and comfortable so that the animals are kept clean, dry and free of lesions.

USDA said it’s concerned the rules will stunt innovation and growth of the organic industry, which reached $47 billion in sales in 2016, according to figures from the Organic Trade Association.

The Center for Food Safety slammed the USDA for walking back needed clarity on organic animal care.

Lydia Wheeler has the story.

 

Courts: A Cincinnati-based federal appeals court dismissed a lawsuit Monday that fans of the hip-hop group Insane Clown Posse brought against the Department of Justice for labeling them a “loosely-organized hybrid gang.”

Known as “Juggalos,” the fans argued the gang designation in the FBI’s 2011 National Gang Threat Assessment violated their First and Fifth Amendment rights.

The 6th Circuit Court of Appeals, however, said it agreed with the district court that the gang designation was not reviewable because it was not a final agency action.

Juggalos made national headlines in September when they marched in Washington, D.C., in an effort to clear their name.

Fans have reported being fired from their jobs, stopped and detained by police and losing custody battles for being Juggalos, wearing band merchandise or having the band’s trademark “hatchet man” tattoo, a silhouette of a man wielding an axe.

Lydia Wheeler has the details here.

 

Courts: Matthew Petersen, whom President Trump tapped to be a federal judge in Washington, D.C., has withdrawn his name after a cringeworthy clip from his confirmation hearing went viral.

A White House official told The Hill, “Mr. Petersen has withdrawn his nomination and the President has accepted.”

Petersen struggled to answer questions from GOP Sen. John Kennedy (La.) about basic principles of law during a wince-inducing appearance before the Senate Judiciary Committee on Thursday.

Lydia Wheeler has the story here.

  

Bitcoin: Bitcoin and other cryptocurrencies rallied to all time highs this past week, attracting new attention from U.S. regulators.

Professional and amateur investors are flocking to the digital currencies as they explode in value. That’s left lawmakers and regulators scrambling to understand the technology behind digital currencies and their implications on financial markets.

“It’s something that they’re just trying to get their arms around,” said a lobbyist representing financial services companies.

“The reality is the speed at which the technology is evolving is much more than what regulators are able to keep up with at this point in time.”

Traders have looked to cash in on the skyrocketing value of digital currencies as commodity prices and bond yields falter. Several regulated exchanges have begun listing or preparing to trade bitcoin derivatives, bets on the future performance of the currency, this week.

The surge in digital currencies has put the traditional financial sector and policymakers on edge. 

Sylvan Lane and Ali Breland report.

 

Religion: The Trump administration is not posting public comments opposing a proposal to reduce regulations for faith-based groups, Politico reported Monday.

The Department of Health and Human Services (HHS) has only posted 80 of the more than 10,000 comments it has received on the proposal since it was posted on Oct. 25. The department stopped taking the comments on Nov. 24.

The proposal in question would remove regulations for religious groups “in order for these institutions to participate in HHS-funded or regulated programs.”

Under the Administrative Procedures Act, federal agencies are required to solicit public comments on proposed rules. All of the comments are typically posted on regulations.gov.

Jacqueline Thomsen has more here. 

 

Tech: Twitter began enforcing new policies to combat hate speech and abusive behavior on the platform Monday, leading to the suspension of several accounts associated with white nationalism.

As part of its new approach, Twitter says it will now start banning accounts that affiliate with groups “that use or promote violence against civilians to further their causes.” The company says that government entities are exempt from this policy.

Twitter began to act on the new policy Monday morning, suspending several prominent accounts involved in white nationalism or the August white supremacist march in Charlottesville, Va. The site also cracked down on a far-right British activist who had been retweeted by President Trump, as well as several other accounts associated with her ultranationalist group.

Twitter will also expand their ban on violent threats to include content that glorifies violence.

Tech companies are hoping to sidestep regulation by tougher policing of their own platforms. 
Harper Neidig has more here.

 

Tech: Facebook says that the number of times it removed content from its platform at the request of local law enforcement skyrocketed in the first half of the year after it cracked down on a viral video of a Mexican school shooting.

According to Facebook’s midyear transparency report, the company restricted content that violated local law 28,036 times in the first half of 2017 — a 304 percent increase from the second half of 2016.

More than 20,000 of those restrictions were of a gruesome video showing a January school shooting in Monterrey, Mexico, in which a 15-year-old student wounded three students and a teacher before killing himself.

The transparency report, released Monday, also shows that Facebook saw an uptick in government requests for user data during the same period. The company received 78,890 such requests from authorities around the world — a 21 percent increase from the latter half of 2016.

Harper Neidig has the details.

 

Cyber: Kaspersky Labs is challenging the Department of Homeland Security’s ban on government agencies using the company’s software in federal court.

“One of the foundational principles enshrined in the U.S. Constitution, which I deeply respect, is due process: the opportunity to contest any evidence and defend oneself before the government takes adverse action,” founder Eugene Kaspersky wrote in an open letter.

The Department of Homeland Security issued a binding directive banning federal agencies from using Kaspersky Lab products in September, citing a potential security threat. DHS claimed the decision was based on “open source” data – information already in the public view, like newspaper accounts and Congressional hearings.

Kaspersky Lab said it plans to argue two key points about the DHS directive. First, Kaspersky was not given enough time to contest allegations before a ban was issued. Second, that the open source documents available at the time of the ban were based more on innuendo than a technical threat that Kaspersky could analyze and respond to.

President Trump recently signed the National Defense Authorization Act, which also contained a provision barring Kaspersky wares from agencies. Even without the DHS directive, the Kaspersky ban would still be codified in law.

But the company believes going to court offers a chance to repair some of the reputational damage caused by allegations against it.

Joe Uchill has more here.

 

ALSO IN THE NEWS

What it’s like inside the Trump administration’s regulatory rollback at the EPA (ProPublica)

EPA contractor has spent past year scouring the agency for anti-Trump officials (The New York Times)

French finance minister calls for bitcoin regulation debate at G20 (Reuters)

Hatch slams ‘regulatory acrobatics’ needed for cannabis research (Deseret News)

Opinion: Government needs to help small businesses follow regulations (The Hill)

Get ready for a faster, pricier, and more confusing internet (The Wall Street Journal)

Fed seeks to trump rules overlapping with US consumer bureau (Reuters)